Saturday, June 19, 2010

Quote of the Day: Minimum Wage

"The inverse relationship between quantity demanded and price is the core proposition in economic science, which embodies the presupposition that human choice behavior is sufficiently rational to allow predictions to be made. Just as no physicist would claim that "water runs uphill," no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores."

~James M. Buchanan, 1986 Nobel laureate in economics, writing in the Wall Street Journal on April 25, 1996

44 Comments:

At 6/19/2010 2:28 PM, Blogger PeakTrader said...

Fish do swim upstream, particularly when they know there's a bigger reward.

 
At 6/19/2010 2:46 PM, Blogger juandos said...

"Fish do swim upstream"...

NOT by freedom of choice though...:-)

 
At 6/19/2010 2:53 PM, Anonymous gettingrational said...

"Fish do swim upstream"...

A lot of fish swim up the Rio Grande.

A lot of fish swim up the Potomac.

:)

 
At 6/19/2010 3:18 PM, Blogger juandos said...

"A lot of fish swim up the Potomac"...

Wow! There's still fish in the Potomac?!?!...:-)

This is totally off topic gettingrationa but your mention of the Rio Grande (used to live in Laredo) reminded me of the following and I was wondering if you had seen it also?

On YouTube: Mexican pirates terrorize residents on border lake

 
At 6/19/2010 4:38 PM, Anonymous gettingrational said...

Juandos, RE: off topic; Thanks for the info on Mexican Pirates. I have a link for you. Eighty north of the border, just south of Phoenix, the Sheriff says that he does not control the county. Illegal Mexicans who are part of drug cartels do!

 
At 6/19/2010 4:39 PM, Blogger juandos said...

Excellent quote BTW...

Consider the words of wisdom of Professor Steve Hanke of John Hopkins in his: Hu versus Sarkozy

There is no more reliable rule than the 95% rule: 95% of what you read about economics and finance is either wrong or irrelevant.

Yes, consider the source of one's information...

 
At 6/19/2010 8:38 PM, Blogger sethstorm said...

Water will flow uphill if pumped enough to overcome gravity.

 
At 6/19/2010 8:42 PM, Blogger sethstorm said...

juandos said...
Re: Off-topic
Do unannounced weapons testing in that area. Anything with a pulse and isn't Border Patrol (or US-based law enforcement) is fair game. Show them same respect they show the US.

Repeat until Mexico solves its problems.

 
At 6/19/2010 10:11 PM, Anonymous Anonymous said...

Speaking of "camp-following whores", isn't Paul Krugman a Nobel laureate in economics too?

 
At 6/19/2010 10:53 PM, Blogger PeakTrader said...

Anon, there are mostly two types of economists:

1. Technocrats, who can explain the bark on the tree with great detail and precision, but can't comprehend the forest.

2. Economists who are so set in their ways that no matter how hard the wind blows to the south, they still have their ship and sails pointed north.

There are few Adam Smiths or Milton Friedmans in economics.

 
At 6/20/2010 8:18 AM, Blogger juandos said...

You know gettingrational maybe Pinal County needs a dose of Sheriff Arpaio to begin solving some of those problems that are rampant in Babeu's jurisdiction...

But I think sethstorm's idea: 'Do unannounced weapons testing in that area. Anything with a pulse and isn't Border Patrol (or US-based law enforcement) is fair game' has a lot of merit...

In fact maybe this Foster-Miller Modular Advanced Armed Robotic System (MAARS) could use a thorough field testing in Arizona...

 
At 6/20/2010 7:10 PM, Anonymous Anonymous said...

The point of minimum wage is not to increase employment but to prevent exploitation. Thereis little point in working a job you can't live on.

 
At 6/20/2010 7:26 PM, Anonymous Anonymous said...

There are good and decent people walking four days through the desert today just to have a chance at a job that probably wont pay minimum wage.
Ther is plenty of blame to go around.

Open a guest program withdouble taxes and a prepaid trip and they woul still come and bigots would still oppose thm.

 
At 6/21/2010 12:37 AM, Blogger Marko said...

"Thereis little point in working a job you can't live on."

Brilliant. I guess that is why no one works for minimum wage, they would rather lounge around the house eating bon-bons.

What you just said may well be the modern equivalent of "let them eat cake".

I love when people claim on one hand that people make too little money, and then do their damnedest to take even that little bit away from them.

 
At 6/21/2010 12:41 AM, Blogger Marko said...

"The point of minimum wage is not to increase employment but to prevent exploitation."

Yes, people are much less exploited when they are out of work.

I really don't understand what is wrong with people. It seems so freakin obvious. If you don't have a minimum wage, people won't work for less than they are willing to work for. People are not children that need your protection from exploitation, you elitist pig.

 
At 6/21/2010 8:25 AM, Blogger juandos said...

"There are good and decent people walking four days through the desert today just to have a chance at a job that probably wont pay minimum wage"...

ROFLMAO!

Well if these people are so supposedly 'good and decent' why are they breaking the law?

"Ther is plenty of blame to go around"...

Yeah, there are far to many leftist Tards in elective office that aid and abet the illegal invasion...

 
At 6/21/2010 9:13 AM, Anonymous Anonymous said...

If you don't have a minimum wage, people won't work for less than they are willing to work for.

I'm no bleeding heart liberal, but you eally need to read your hisory book. People will work for less than they are willing to and even less than they can earn a living for, like early American and British seaman, or sweat shop girls in New York, if they have no choice.

It is called a trap, and unless you have been in one or actually seen it up close, you cannot know what I mean. Try harvesting tomatoes in South Carolina for $5.00 an hour - back breaking labor in the broiling sun and tell me anyone does that willingly.

Given absolute free reign business interests will pay the absolute minimum they can, and the result will be the same kind of conditions that caused the labor union excesses that now plague some companies and some countries. They did not get that wqay without reasons.

The situation might be different for some kinds of part time jobs, internships, or situations where real training and opportunity is involved, but when a below entry level job is a permanent career, something is wrong.

Besides that, some people are only capable of earning at a below minimum level wage. We have all been plagued by incompetents at one time or another, and we should consider whether we are better off to simply pay them to stay away. Nothing says that a job is either a right or a requirement of humanity, particularly when technology means we can produce all we ever need with a fraction of the work force.

===================================

"Well if these people are so supposedly 'good and decent' why are they breaking the law?"

Same reason people who offer them below minimum wage to work illegally do. Except, they also want to go to church on Sunday and send money home to their families.

If you want to create criminals, just make laws that people cannot live with. They are breaking the law because the laws are FUBAR.

This system is broken and it needs to be fixed. Like I said, give them temporary work permits provided they pay 2X social security tax, and they deposit enough for a plane trip home. If they take the bus they can get a refund at the border, and return after some interval of time.

Surely there is SOME kind of situation that protects American workers and still allows competition. Not that there is much competition: I sometimes use some (legal) Nicaraguans, and those guys work like animals

Plenty of Mexicans, and Slavadoreans, and Guatemalans would love to go home periodically, but they cannot because they would have to break the law again, brave ladrons, coyotes, border police, and the desert AGAIN just to get back to where they are: which is probably exploited and below minimum wage.

Surely there is SOME kind of situation that protects American workers and still allows competition. Not that there is much competition: I sometimes use some (legal) Nicaraguans, and those guys work like animals.

How about if you come up with a suggestion you could live with and might actually work - something other than attempting to round up 12 million useful people and ship them back?

 
At 6/21/2010 9:17 AM, Anonymous Anonymous said...

Yes, people are much less exploited when they are out of work.

When they are out of work, they are not exploited. When they are paid less than they can live on, they are exploited. If I have draft animals I cannot take 50,000 calories of work out of them and feed them 40,000: I would go to jail, or the animals would be confiscated.

Why should we allow busininess to treat people that way?

 
At 6/21/2010 9:21 AM, Anonymous Anonymous said...

Shoot, if I cannot afford my draft animals, I cannot even turn them out on the street: it is up to ME to find another place for them.

 
At 6/21/2010 9:25 AM, Anonymous Anonymous said...

If I turn my draft animals out to pasture and they are not working, they consume no where near as much feed. But if I work them and feed them less than they need to do the work, THEN they are exploited.

I really don't understand what is wrong with people. It seems so freakin obvious.

 
At 6/21/2010 10:52 AM, Blogger juandos said...

A truly bizzare anon @ 6/21/2010 9:13 AM says: "I'm no bleeding heart liberal..." then goes onto spill all the revisionist history talking points liberals love... Hilarious!

Now the whine comes: "Try harvesting tomatoes in South Carolina for $5.00 an hour - back breaking labor in the broiling sun and tell me anyone does that willingly"...

Well old son been there, done that, bought the t-shirt in an area that's damn site hotter than S. Carolina and did it all through grade school and high school for a lot less than $5.00/hour...

I had a choice, stay home during the summers and the weekends when school was in session or go out and work so I could get what I wanted since my parents were already giving me room, board, and tuition...

"It is called a trap, and unless you have been in one or actually seen it up close, you cannot know what I mean"...

Thinking folks call it 'nonsense' since in this country we still have choices Obama not withstanding...

"Same reason people who offer them below minimum wage to work illegally do"...

Nice of you impale yourself on your own FUBAR...

Thanks for playing...

BTW do the government imposed costs of hiring and paying someone ever figure into your alledged 'non-liberal' thinking?

 
At 6/21/2010 11:28 AM, Anonymous Anonymous said...

What's revisionist about how American and British seamen lived?

I'm sure my comments seem bizarre to you, but my experience is different from yours.

 
At 6/21/2010 11:31 AM, Anonymous Anonymous said...

did it all through grade school and high school for a lot less than $5.00/hour...

Me too, and grade school was how long ago? Pick an argument that is current.

Didn't they have child labor laws then? now tell me you did it willingly, and didn't wish for something better.

Talk about revisionist history.

 
At 6/21/2010 11:33 AM, Anonymous Anonymous said...

since my parents were already giving me room, board, and tuition...

Like I said, you didn't have to actually make a living at it. Not the same thing, not even close.

 
At 6/21/2010 11:36 AM, Anonymous Anonymous said...

Thinking folks call it 'nonsense' since in this country we still have choices

Clearly you do not understand or have not done much thinking, or have not really seen the situation up close.

It is a trap when all of your "choices" are bad ones. yes, there are still choices. Even not making a choice is a choice. it is a lousy argument, and seemingly a favorite on non-thinking conservatives.

 
At 6/21/2010 11:38 AM, Anonymous Anonymous said...

"Same reason people who offer them below minimum wage to work illegally do"...


Maybe I wasn;t clear enough for you.

I should have said:
"Same reason people who illegally offer them below minimum wage to work illegally do"...


There is, as I said, plenty of blame to go around.

You never did come up with your suggestion.

 
At 6/21/2010 11:43 AM, Anonymous Anonymous said...

"government imposed costs of hiring and paying someone "

Government imposed costs ought to apply equally so as to preserve individual liberty while imposing EQUAL individual responsibility.

If that is the case then playing field and competition is level. And of course you have the "CHOICE" of working for yourself.

That said, we know that the playing field is NOT level because corporate interests (and government interests) frequently use the regulatory process to create barriers to entry. (All the while moaning about government intervention.)

 
At 6/21/2010 5:05 PM, Anonymous grant said...

Anon all posts;
You have missed the point entirely!
"AMERICA" is a bankrupt country!
The job applicant no longer calls the shots but makes the best deal he can with a prospective employer if you are an idiot that never learns you will keep carrying on with your dreams but the realist applicant will get the job and you won't. JUANDOS is right wake up and progress or get left behind when the economy lifts out of the current rut because when it does you could be surprised at the rush.
For that you will have contributed nothing and will be starting from the back of the field playing catch up.
You will not convince any long termer that your crap can stick because they know better because they have been through it before.
New capital has to be created in the private sector so shut up and get on with it.
Grab any job you can and then jump to the next job opportunity when you are offered a better one.Do ANYTHING SAY ANYTHING but get the job and the income. You can then work your way up from there

 
At 6/21/2010 5:46 PM, Blogger sethstorm said...

The job applicant no longer calls the shots

That's the problem.

 
At 6/21/2010 7:46 PM, Blogger juandos said...

"What's revisionist about how American and British seamen lived?
"...

The fact that you leave out the part where these gents had a free choice of whether to go to sea or not...

"Didn't they have child labor laws then?"...

No, society wasn't saddled with that liberal nonsense back in the sixties in south Texas...

"now tell me you did it willingly, and didn't wish for something better"...

No doubt but so what? I still had a choice and I made it...

"Like I said, you didn't have to actually make a living at it. Not the same thing, not even close"...

Ahhh, still clinging to that very tenuous grip on reality I see...

"It is a trap when all of your "choices" are bad ones"...

Yet another BS flag on the field of play...

If all one has are bad choices then bad life choices were made before hand...

"You never did come up with your suggestion"

You never actually asked for one but now that you have I suggest its time for Obama's fellow moonbat and Labor Secretary Hilda Solis who aids and abets crime to be impeached...

 
At 6/21/2010 8:30 PM, Anonymous Anonymous said...

How did you get so mean and bitter and so untruthful so young?

It must have been that free ride your parents gave you. I had to pay rent. From my first job.


Seamen were impressed into service. They had no choice and often owed the ship more than they earned. Actually I did ask. And for ysomething that might actually help.

Economic 101 is that you can't work animal for less than it costs to run even if it is a human animal.

How many employees do you have anyway?

 
At 6/21/2010 8:42 PM, Anonymous Anonymous said...

Bad choices were made beforehand.

Easy to say from someone who had parents.

That gave him a free ride.

 
At 6/21/2010 8:45 PM, Anonymous Anonymous said...

After you impeach Hilda what will you do to solve the problem at hand?

 
At 6/21/2010 10:11 PM, Blogger juandos said...

"How did you get so mean and bitter and so untruthful so young?"...

It came about having to deal with libtards like you...

"Easy to say from someone who had parents"...

Do you have to brag about what you don't know?

I wasn't living with my parents when I was working, far from it in both distance and travel time...

"I had to pay rent. From my first job"...

So what did your parents charge you to hang out in the basement?

Just curious...

"Seamen were impressed into service"...

Americans had a choice, don't care about the Brits...

We fought a war against the Brits so Americans could continue to have a choice...

"After you impeach Hilda what will you do to solve the problem at hand?"...

So a cabinet official flouting federal law isn't a problem? Is this more of your FUBAR showing?

Regarding the minimum wage, get rid of the federal minimum wage law...

Educate yourself with some Thomas Sowell...

 
At 6/21/2010 10:53 PM, Anonymous Anonymous said...

Grant bankrupt is when you work your animals fifty thousand calories andfeed them forty.

 
At 6/21/2010 11:12 PM, Anonymous Anonymous said...

Juandos

You said your parents paid your room board and tuition.

With that kind of help you could afford to work cheap. You had a choice.

I paid25% to the family. Family being the local government, if you will. I was expected to meet my own needs out of what was left but I could fall back on the family in an emergency.

That happened exactly once.

I paid my way from hs through grad school and graduated debt free with cash in the bank

I guess that makes me a raging liberal.

Airlines huh. The way you beat up on people I'm guessing bag handler.

I'd hate to think with your problem solving skills that you are a mechanic.

 
At 6/22/2010 12:47 AM, Anonymous Anonymous said...

Americans were Shanghaid but you are deliberately missing the point. You were given much but then go on about others bad choices

Sowell is a fine writer you could learn some reason from him

After you impeach Hilda what will you do to solve the problem of illegal employers and illegal workers?

From what you say the idea is to legalize work for zero pay, no minimum wage, and grant amnesty to illegal employers, then have unannounced weapons testing on their main source of employees.

So self determination for the employer class and extermination for the employee class.

Which school of economics is that?

I see you are willing to eliminate the minimum wage law to eliminate illegal behavior,what about the immigration laws?

Or maybe the other way around. We keep both laws and deport anyone who breaks either. Just to be fair.

 
At 6/22/2010 1:15 AM, Anonymous Anonymous said...

Grant

I've been continuously employed for almost fifty years, including the current and previous slumps

I think I know how to get and keep a job. It helps if you talk sense and have skills. Also helps to have your own business.

Except for three years I was disabled and unable to work or buy health insurance. Then I pretty much ran out of any choice that did not involve lying in bed

I got lucky. Extremely lucky. I'd like to claim it was self determination and good choices that got me back on my feet and back to productive work, but it would be the same nonsense juandos spouts.

 
At 6/22/2010 10:31 AM, Blogger juandos said...

anon @ 6/21/2010 11:12 PM still babbling on like an idiot, why is that?

"You said your parents paid your room board and tuition"...

Its ususally what happens when responsible parents have a kid in a private K-12 facility...

 
At 6/22/2010 11:31 AM, Anonymous Anonymous said...

The point is that you could afford to work for a low wage because you had other income.

My original argument was that there is no point in working for a wage you cannot live on.

This came up because I pointed out that the object and result of the minimum wage was not to increase or decrease the availability of jobs but to prevent exploitation, which obviously was not a problem in your case.

Sowell correctly hits it on the head when he points out that

"few people of any philosophical, political, or economic persuasion would want to see either (a) job-seekers unemployed with a hypothetical right to a “living wage,” or (b) people employed at very low wages when they could be equally fully employed at normal wages."

The minimum wage law attempts to prevent part (b) while avoiding part (a). Sowells argument is that this balance cannot be met with automatic minimum wage increases, and one of his conclusions is that more congessional oversight is needed.

Sowell also points out, as I did, that there are some people with abysmally poor skills. I submit that we may be better off without them in the work place, which the minimum wage law may do.


===============================

After you impeach Hilda what will you do to constructively solve the problem of illegal employers and illegal workers?

 
At 6/23/2010 5:36 PM, Anonymous Mo said...

I submit that we may be better off without them in the work place, which the minimum wage law may do.

wether we are better off without them is irrelevant. Also who is this "we" your talking about? Is this just an example of utilitarianism?

 
At 6/23/2010 5:55 PM, Anonymous Mo said...

When they are out of work, they are not exploited. When they are paid less than they can live on, they are exploited.

If you never eat you do not face the risk of food poisoning. Thats true but its not a good argument for never eating.

Likewise, it is true you minimize the risk of getting exploited if you have no chance to ever get a job because of the minimum wage. But the mere fact that you can get/will get exploited is no reason to not go to work and earn a living. Starvation is the alternative.

 
At 6/23/2010 6:43 PM, Anonymous Anonymous said...

I submit that we may be better off without them in the work place, which the minimum wage law may do.

and who are you or Congress to decide who does or does not stay in the workforce?

 
At 6/26/2010 7:44 PM, Blogger Kyle said...

I don't disagree with you that raising minimum wage makes some workers unemployable, but I think that one of the reasons we don't usually see a large increase in prices after a minimum wage increase is because such a small portion of the population actually earns minimum wage. What is it? 1%

 

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